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Quick context 🗓
Last week, Viacom18 (owned by Reliance) believed to have decided to stream IPL for free on the Jio app. Yes, you heard that right - FREE.
Disney+ Hotstar (which owned IPL streaming rights for last few years & lost to Jio for 2023-27 ) put all IPL live match streaming behind a paywall. IPL fans had to shell out Rs.149 for a minimum 3 month plan to watch IPL with ads.
Jio is changing the rules of the game🤞🏻
Think of it this way, there are over 800 million smartphone devices in India. At it’s peak, Hotstar had 300 million monthly active users. That’s 37% of market share by the biggest sports OTT. Not enough considering the offering.
And that’s core to Jio’s free strategy 💡
It wants to solve for ‘category expansion’ first. It did if first with telecom → free calling & got every smartphone access to high speed internet in turn building a complete ecosystem. With over 388 million telecom subscribers it has one of the largest smartphone distribution channel.
The whole IPL for 2023-27 digital media rights were bought by Jio at Rs. 50 Cr per game. To breakeven Jio will need to get a lot more advertisers. Typical rates for IPL are 10L for a 10 sec ad pan India. Jio will reduce the rates & we’ll see a lot more smaller companies participating in IPL ads, it’s going to get crowded & meatier.
And the game hasn’t even started 💪🏻
With IPL user acquisition for Jio is sorted to an extent. But, with addition of offerings from it’s cousin Voot or even it’s own IP shows/ movies it will focus on time spent on the Jio app. You may see a Voot + Jio offering similar to the likes of Disney+Hotstar.
Prediction : With free IPL on top of Jio’s telecom distribution it will reach the 500 million Internet + Smartphone + OTT mark before 2024 (that’s 2 IPL seasons).
The real cash cow starts at 500 million users 💰
You own the user & the user has two core needs getting fulfilled inside the Jio ecosystem. First is “Data + Calling” and the other being “entertainment”. This opens up monetisation opportunities for Jio to launch whatever they want to for the Bharat audience.
Jio has the content advantage 📺
Remember the last time a product had so much distribution in India? Think 2016 demonetisation & the likes of PayTm. But, PayTm had users coming to the app for transactions and not really content consumption. And that’s a huge difference.
Content consumption = exponential time spent inside the app. This is exactly what Jio will enjoy in it’s own ecosystem and cross-sell / upsell like WeChat in China.
Revenue growth is a tricky game 💰
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